Friday, March 8, 2013

PCC: Complete Profile

Power Corporation of Canada

Hoover's Company Profiles: 

Power Corporation of Canada

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(Toronto:POW)
Contact Information
Power Corporation of Canada
751 Victoria Sq.
Montreal, Quebec H2Y 2J3, Canada
Tel. 514-286-7400
Fax 514-286-7424
Type: Public
On the web: http://www.powercorporation.comEmployees: 30,700
Employee growth: (1.4%)
Founded in the 1920s to develop hydroelectric power, Power Corporation of Canada now generates cash, not electricity. Through its majority stake in Power Financial, the company controls one of Canada's leading mutual fund firms (IGM Financial), one of its largest life insurers (Great-West Lifeco), and other insurance firms. It also owns Gesca, which publishes Montreal's "La Presse" and six other daily newspapers in Quebec and Ontario, and a majority of Pargesa Group, which has stakes in large companies involved in energy (TOTAL), utilities (GDF SUEZ), construction (Lafarge), wines and spirits (Pernod Ricard), and other sectors in Europe through a controlling stake in Groupe Bruxelles Lambert.
Key numbers for fiscal year ending December, 2011: 
Sales: $32,266.9M
One year growth: (1.9%)
Net income: $1,094.1M
Income growth: 20.7%
Officers:
Chairman and Co-CEO; Co-Chairman, Power Financial: Paul Desmarais Jr.
EVP and CFO, Power Corporation of Canada and Power Financial: Investment Firms
Gale Directory of Company Histories: 

Power Corporation of Canada

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Incorporated: 1925
NAIC: 551112 Offices of Other Holding Companies; 52421
SIC: 6719 Holding Companies Nec; 6411 Insurance Agents, Brokers & Service; 2711 Newspapers
Power Corporation of Canada controls a variety of companies involved in finance, insurance, and communications. Through subsidiary Power Financial Corporation, the company controls the largest mutual funds company in Canada, Investors Group, and the largest life insurance company in Canada, Great-West Lifeco. The other primary operating subsidiaries include Pargesa Holding, which owns substantial investments in a variety of industries in Europe, and Gesca Ltée, the publisher of Montreal's La Presse and three other daily newspapers.
In the early 1890s, Winnipeg was a frontier town of lumbermen and plains traders. As a stop on the slowly growing Canadian Pacific Railway, it was a promising growth point in the western province of Manitoba. The difficulty of transportation combined with drought created hard economic times for the region during the decade, however. An optimistic local businessman, Jeffry Hall Brock, recognized that capital was needed to invest in local farm and retail development. His vision was to collect western Canadians' savings via insurance sales, thereby offering them security and protection, while simultaneously financing development through the proceeds. At this time, only nine of the 40 insurance companies in Canada were Canadian. Not one of these companies was based in western Canada.
The Great-West Life Assurance Company was incorporated in 1891 with a name that reflected the company's regional pride; the hyphen was a typesetter's error. In the first year, 834 life insurance policies were sold, representing more than $2 million worth of protection, by a sales force of three that included Brock. The bold enterprise attracted the involvement of the area's outstanding businessmen, and early shareholders included bakers, farmers, a harnessmaker, and the sheriff. Support came from bustling Toronto as well as from many local rural communities. The mayor of Winnipeg, Alexander Macdonald, became Great-West's first president in 1892. Brock was made managing director.
The company issued its premier manual in 1892, offering six insurance plans. The first claim was received that same year. By the end of 1893, Great-West--competing with five- to 50-year-old companies across Canada--ranked eighth highest in profitability. At this point, the self-confident young company made the remarkable decision to enter the eastern Canadian markets. Its well-established competitors were situated in the East, as were the country's banking, financial, and manufacturing institutions. The West had essentially one industry: agriculture. In Great-West's first three years, it had achieved the financial backing and business volume that had taken other companies up to 15 years to reach.
Great-West's prosperity continued during the next two decades. By the turn of the century, the company was represented in every province and was the country's fastest growing life insurer. As the economy improved when the region's depression lifted, the service industry benefited. In 1896 Great-West gained the largest percentage of new business written, out of 21 Canadian life insurance companies, to make it only $80,000 behind the industry leader in aggregate gain of policies in force. The first shareholder dividends were paid in 1901, and dividends were paid every year since.
In 1906 the company crossed the border and established U.S. operations in North Dakota. The next year, Great-West topped all Canadian companies in paid-for business. From 50 applications a month in 1893, the company received an average of 375 monthly applications by 1909. However, the growth proved a strain on the founder's health. Brock essentially left the company in 1912 for medical reasons, and he died in 1915. C.C. Ferguson succeeded Brock as CEO in 1915, one year after the onset of World War I.
With the war came a boost to the area's economy, which had declined as the wheat boom receded and freight rates climbed, but the war presented the life insurance industry with the problem of wartime policies. Most firms charged extra premiums for those in the service, but Great-West kept its extra charges at a minimum as part of its war effort. Throughout the war, the company managed to keep up its record, maintained since 1906, for writing more ordinary business in Canada annually than any other company. Nevertheless, the war's impact was felt: claims for wartime deaths totaled $1.5 million. Almost as catastrophic was the flu epidemic that flared up at the war's end from 1918 to 1919, which cost Great-West more than $1 million in death claims.
Canada, like other countries, then contended with conditions following the war, including high rates of inflation and unemployment, labor unrest, and slowed agricultural output. Though the economic situation worsened through the 1920s, Great-West showed a steady increase in business. In 1920, U.S. operations were extended into Michigan and Minnesota. That same year, Great-West became one of the first companies to offer group insurance. The concept took many years to catch on. In 1940 group insurance was still only nine percent of the company's total business. In later years it comprised more than half. In 1926 Macdonald retired as president, succeeded by G.W. Allan, who had been company director for 22 years.
Great-West, which had initially concentrated its investments in farm mortgages, had diversified since the war into government bonds and city mortgages. Because of its diversified investments and the fact that stock holdings were a very small part of the company's portfolio, Great-West was well insulated when the market crash of 1929 occurred.
The Great Depression years of the next decade provided a new challenge. Business declined between 1932 and 1937, but Great-West managed a gradual increase in assets during the period. By the company's 45th anniversary in 1936, it provided coverage for nearly one million people in North America, issuing an average of 60 policies per business day. New insurance plans were introduced during the Depression, including a policy for the professional woman and a family protection policy. By the summer of 1939, Great-West was again enjoying record-breaking figures in applied business.
The decade of depression was ended by the outbreak of World War II, which stimulated employment and industrial activity. The life insurance industry was dramatically revived, and between 1939 and 1945 Great-West enjoyed tremendous growth as well as expansion into Indiana, Missouri, Ohio, Kansas, California, and Pennsylvania. Group insurance and group pension plans steadily increased. Also during the war years, Great-West entered into the individual accident and health insurance fields. The company changed presidents in 1940, when M.F. Christie took the job, and again in 1943, when W.P. Riley assumed the position.
During the postwar boom, the company's business boomed too. In 1946 Great-West's business-in-force reached the $1 billion mark. It would reach its second billion only six years later and its third three years after that. The company continued its expansion in the United States, entering seven more states between 1946 and 1952. In 1958 it started doing business in five more states and the District of Columbia. Also in 1958 Great-West began technological expansion; it purchased the first computer in western Canada.
Growth continued throughout the prosperous 1960s. In 1968 Great-West became the first Canadian company authorized to sell a variable annuity in the United States. More than $1 billion of new business was contracted that year.
Business in the United States grew rapidly. By 1973 Great-West was licensed in 28 states and the District of Columbia, and had opened a marketing office in Denver, Colorado. The company separated its Canadian and U.S. operations, except for investment and corporate operations, in 1979. It also opened the company's U.S. headquarters in Denver that year. By then Great-West Life was operating in 45 states. From 1979 to 1983 U.S. business nearly doubled.
During the next decade, Great-West concentrated on product development, asset management, and developing the two regional operations. The Canadian and U.S. markets developed different needs during the 1980s. One of the company's new products was a universal life policy, first introduced in 1982--the first of its kind designed for the Canadian market. A similar policy was introduced in the United States the following year.
Another Great-West innovation was a system it introduced in Canada that paid agents levelized commissions and offered loan arrangements for agents needing additional income. It was the first insurance company in North America to adopt such a system. This arrangement allowed the sales force to experiment with the sale of new products with less fear of financial repercussion. As a result, universal life business increased from 30 percent in 1983 to almost 60 percent in 1985. Over those three years, career agents enjoyed a 65 percent compound growth rate in average earnings.
In the mid-1980s, the company's structure changed. Great-West had been a joint shareholder-policyholder-owned company from its inception until 1969, when Investors Group acquired controlling interest in the company's common shares. Investors Group was acquired by Power Corporation, a Montreal-based holding company with interests in publishing, pulp and paper, and financial services, in 1969. In 1984 Power Corporation formed Power Financial Corporation to hold Great-West and its other financial service companies.
Behind the formation of Power Corporation stood two financiers, A.J. Nesbitt and P.A. Thomson, principal partners in a Montreal investment firm named Nesbitt, Thomson and Company. Shortly after its founding in 1912, the company began underwriting and investing in Canadian hydroelectric utilities, financing the construction of utilities and promoting their development. For nearly 15 years, the investment firm poured its resources into the burgeoning electricity industry, but during the early 1920s the industry was besieged by an unwelcomed intruder, prompting Nesbitt and Thomson to take action. An unnamed speculator from Chicago was marching across the United States, acquiring one utility company after another as he went. Nesbitt and Thomson feared an incursion onto Canadian ground and the probable end to their underwriting and investment activities. To help keep Canada's power sector in Canadian hands the pair resolved to form a holding company that would serve as an umbrella organization for a family of affiliated Canadian utility companies. Consolidation became Nesbitt's and Thomson's mode of defense, and Power Corporation of Canada, formed in April 1925, became the instrument through which the financiers would ward off the hostile threats of foreigners.
Power Corporation started business with an initial capitalization of C$5.5 million, with the majority of the company's shares held by its two founders. Nesbitt was appointed as president of the holding company, but he delegated much of the day-to-day management of Power Corporation to his vice-president, James B. Woodyatt, an electrical engineer and power company executive. With their start-up money, Nesbitt and Thomson did what they did best--invested in utility companies--assembling Power Corporation's first portfolio of properties. They assumed control over three utility companies, Canada Northern Power, Ottawa and Hull Power, and Ottawa-Montreal Power, and made sizableinvestments in a host of other power companies, including East Kootenay Power, Winnipeg Electric, Dominion Power and Transmission, and Southern Power. By the end of the company's first year, net earnings reached C$246,000.
Nesbitt and Thomson had hoped to profit from an anticipated growth in demand for electricity by industrial and residential customers. Their first five years in business substantiated their hopes, as Power Corporation realizedstrident growth. To promote the use of electricity, the founders created a department exclusively devoted to encouraging new industries to locate their plants near Power Corporation's utility companies. To spur residential demand, the company opened stores stocked with electrical merchandise, presenting the wonders of the new age to communities near the company's facilities. Most importantly, Nesbitt and Thomson continued to add meaningfully to Power Corporation's utility portfolio, developing a large and diverse collection of assets. Between 1925 and 1930, the founders invested in more than two dozen public utilities operating in a wide geographic area, stretching from the United States to Japan to Brazil. By 1930, Power Corporation's affiliated companies operated 40 power plants, enabling the company to eclipse C$5 million in net earnings for the year.
After a rousing start to its business life, Power Corporation suffered through a tortuous period when the Great Depression brought its strident progress to a halt. Financial stagnation set in, as the company's earnings either fell or remained flat for more than a decade. Further, the company's investments plunged in value. Many were liquidated at substantial losses, striking a deleterious blow to the once-powerful concern. Unlike many other enterprises, however, Power Corporation survived the most severe economic crisis of the 20th century and, after the disruption engendered by World War II, Nesbitt and Thomson could look forward to resuming the progress achieved during their first five years as entrepreneurs.
As Power Corporation celebrated its 25th anniversary in 1950, the company stood poised to reap the rewards of increased energy usage during the postwar industrial expansion set to unfold. Approximately 60 percent of the company's investments were in its six mainstay hydroelectric companies, which supplied electricity or gas to more than two million Canadian customers. At first blush, Power Corporation's enviable foundation in energy suggested great promise for the years ahead, but by the early 1950s the company's future presence in the power sector was already in doubt. Nesbitt and Thomson had taken note of three alarming events. In 1944, Northern Ontario Power, a subsidiary of Canada Northern Power, had been expropriated by the Ontario government's Hydro-Electric Power Commission. Two years later, the French government nationalized the public utility companies controlled by Foreign Power Securities Corporation, in which Power Corporation had invested heavily not long after its formation. In 1953, the government-controlled Manitoba Hydro-Electric Board assumed control over Winnipeg Electric, underscoring the emergence of a portentous trend for Power Corporation
Power Corporation continued to invest in power companies as the 1950s progressed, but Nesbitt and Thomson realized the company's future depended on developing a new corporate strategy. Toward this end, the financial settlements obtained from the expropriation of Foreign Power Securities and Winnipeg Electric, coupled with the compensation derived from future government takeovers, provided the capital to diversify the company's portfolio. By 1952, Power Corporation had made substantial investments in other sources of energy and in other industries, most notably in the pulp and paper industry through an investment in Bathurst Power and Paper. Further moves towarddiversification followed, as Power Corporation methodically shed its interests in utility companies. The transformation picked up speed following the deaths of Nesbitt in 1954 and Thomson two years later, their mandate for diversification embraced by their sons, A. Deane Nesbitt and Peter N. Thomson, who assumed control over the company.
As Power Corporation entered the 1960s, it prepared to shed the vestiges of its former self. The company began the decade still regarded as a holding company primarily interested in electrical energy, but the percentage of its investment portfolio devoted to hydroelectric power had dropped from 60 to 39 during the previous decade. Its remaining investments were in oil, gas, and pipelines (33 percent); finance (11 percent); pulp and paper (ten percent); and other industries (seven percent). Peter Thomson took over as president and chairman of the company in 1962, marking the beginning of fast-paced changes and the adoption of a new corporate strategy. His efforts were financed by the nationalization of utility companies in which Power Corporation held substantial stakes. In 1961, the government of British Columbia expropriated the principal assets of British Columbia Power, yielding C$8 million in compensation for Power Corporation Two years later, the government of Quebec paid C$19 million for Power Corporation's shares in Shawinigan Water and Power and the Quebec subsidiary belonging to Canada Northern Power. With the proceeds obtained from these expropriations, Thomson altered Power Corporation's investment strategy. Instead of investing in a broad assortment of companies in which Power Corporation maintained little managerial control, Thomson decided to invest in fewer, more diversified companies in which the company could assume a more active managerial posture. Accordingly, the number of companies composing Power Corporation's portfolio dipped from 31 to 18 between 1962 and 1965.
Thomson did not have long to test the merits of his new investment strategy. During the mid- and late 1960s, Power Corporation was beset by a number of problems, as several of its affiliated companies suffered financially. For example, Consolidated-Bathurst, which had been created in 1966 from the merger of Power Corporation's two largest pulp and paper investments, shared in the losses recorded by the rest of the industry as overcapacity and rising operating costs plagued Canadian pulp and paper companies. Canada Steamship Line, another Power Corporation property, was rocked by protracted labor disputes. Other Power Corporation affiliates saw their valueplunge as well, with some of the problems attributable to external pressures and some to problems of their own making. For Thomson, the problems were serious enough to warrant a far-reaching response, one that marked a momentous turning point in the history of Power Corporation In 1968, Thomson agreed to merge with Trans-Canada Corporation Fund (TCCF), a C$75-million holding company controlled by legendary entrepreneur Paul Desmarais.
A native of Sudbury, Ontario, Desmarais was 39 years old when he became chairman and chief executive officer of Power Corporation Roughly two decades earlier, Desmarais had dropped out of law school to rescue his father's failing bus service. After resurrecting his father's company, Desmarais used it as a foundation for what would become a business empire. He acquired other bus lines in Ottawa, Quebec City, and throughout the province of Quebec, then diversified his interests into life insurance, newspapers, communications, and real estate. By the time of the share-exchange transaction with Power Corporation, Desmarais's core assets included ownership of Provincial Transport, a major inter-urban bus line, majority control of Toronto-based Imperial Life Assurance, a raceway, a radio station, and various real estate properties. Further, Desmarais's TCCF also controlled Gesca Ltée, which controlled La Presse,Montreal's largest and most respected daily newspaper, as well as 62 percent of Les Journaux Trans-Canada's three daily newspapers and ten weekly newspapers in Quebec.
Initially, as Power Corporation evolved from an investment holding company into an operating company, Thomson and Desmarais each controlled 30 percent of the voting shares of the newly merged company. By 1970, however, Desmarais had gained sole control. He immediately began stripping away Power Corporation's portfolio in an attempt to consolidate the company's control over a small number of diverse assets. The restructuring process took roughly a decade to complete, which restricted the company's ability to expand in any substantial manner, but by the end of the 1970s Power Corporation was healthy on all fronts and Desmarais could point to robust financial results. In 1979, the company's consolidated net earnings reached C$98 million, more than double the total registered the previous year. In 1980, net earnings swelled to C$121 million, convincing Desmarais that Power Corporation was strong enough to pursue expansion.
Before Desmarais embarked on the acquisition front, he first completed a divestiture--an enormous sale that, for the first time in his business career, left him without a bus service. In 1981, Power Corporation sold its CSL Group, which included Canada Steamship Lines, an operator of oceangoing vessels and Great Lakes freighters, and the bus lines Desmarais had acquired during the 1960s. The C$195 million divestiture allowed Power Corporation, according to federal regulations, to acquire 4.4 percent of the voting shares of Canadian Pacific Limited. A massive rail, shipping, oil, and real estate conglomerate. Also in 1981, Power Corporation invested C$20 million in Pargesa Holding S.A., a Swiss corporation that owned a major interest in Banque de Paris et des Pays-Bas. Subsequently, Power Corporation's major financial holdings in Investor Group, Great-West Life, Montreal Trust, and Pargesa were transferred in 1984 to a new subsidiary, Power Financial Corporation, which completed an initial public offering (IPO) of stock in 1985.
With the proceeds raised from selling a portion of Power Financial to the public, combined with the sale of stock of other Power Corporation subsidiaries, Desmarais eliminated all long-term debt. Once the company was free of debt--a condition Desmarais maintained until the end of his leadership tenure--Power Corporation pursued strategic expansion. In 1986, the company acquired the Quebec and Ontario radio and television stations belonging to Ketenac Holdings Ltd. and Prades Inc., which were later consolidated into a new wholly owned subsidiary, Power Broadcasting. Concurrently, the company, through its Consolidated-Bathurst subsidiary, formed a joint venture with China International Trust and Investment Corporation (CITIC), the international investment arm of the People's Republic of China. Initially, the joint venture constituted the acquisition of a pulp mill in Castlegar, British Columbia, marking the beginning of an enduring business relationship with the Chinese government.
The 1980s ended with the sale of one of Power Corporation's two principal operating companies. Although Desmarais was not looking to sell the company's stake in Consolidated-Bathurst, he could not refuse the unsolicitedoffer made by Stone Container Acquisition Corporation. In January 1989, Stone Container offered Power Corporation C$25 per share for its interest in the pulp and paper concern, representing one of the largest deals in Canadian business history. Power Corporation received more than C$1 billion from the deal, giving the company the financial means to explore new business opportunities in the 1990s. The company's coffers received another substantialwindfall two months after the divestiture of Consolidated-Bathurst. In March, the parent company of Bell Canada offered more than C$500 million for the shares held by Power Financial in Montreal Trust.
Although Power Corporation had a substantial amount of cash to invest as it entered the 1990s, the first half of the decade was bereft of any major transactions equal to the stature of its two 1989 divestitures. By no means, however, did the company retreat from pursuing expansion. Further investment opportunities were developed with CITIC, resulting in the formation of Power Pacific Corporation, which opened offices in Hong Kong in 1994 and Beijing in 1998. In 1996, Compagnie Luxembourgeosie de Telediffusion, which was indirectly controlled by Pargesa, merged with the broadcasting subsidiaries of Germany-based Bertelsmann, creating CLT-UFA, Europe's largest radio and television group. Another notable event was the C$180 million investment made by Power Corporation in Southam Inc., Canada's largest daily newspaper publisher.
In 1996, Desmarais relinquished his posts as Power Corporation's chairman and chief executive officer, ending an era of remarkable growth for the company. During Desmarais's tenure, Power Corporation's corporate assets had increased from C$165 million to C$2.7 billion, as net earnings swelled from C$3 million to more than C$200 million. The difficult task of equaling this record of leadership fell to Desmarais's two sons, Paul Desmarais, Jr., who was named chairman and co-chief executive officer, and Andre Desmarais, president and co-chief executive officer.
The Desmarais brothers did not shy from imprinting their mark on Power Corporation, as they guided the company toward its 75th anniversary and the beginning of the 21st century. Shortly after they inherited control over the company, Paul, Jr., and Andre sold the company's interests in Southam for C$294 million. The following year the company, through Great-West Lifeco, paid C$3 billion for all of London Insurance Group, which controlled London Life Insurance, a Canadian insurance company with the largest sales force in the country. The acquisition made Great-West Lifeco the largest health and insurance company in Canada, employing more than 7,000 financial representatives.
As the 1990s drew to a close, Power Corporation appeared to have made a seamless transition from one generation of management to the next. The Desmarais brothers proved themselves capable leaders during their first five years in charge, and, after selling Power Broadcasting's Canadian radio and television assets in 1999, possessed the financial resources to galvanize their reputations during the 21st century. The company, during its 75th anniversary year, represented one of Canada's elite business enterprises, supported by stable and diverse holdings in North America, Europe, and Asia. As Power Corporation entered the new century, consolidated assets eclipsed C$57 billion and net earnings exceeded C$500 million.
Principal Subsidiaries
Gesca Ltée; Power Broadcasting Inc.; CITIC Pacific Ltd.; Power Financial Corporation (67.4%); Power Financial Europe B.V. (The Netherlands); Pargesa Holding S.A. (Switzerland); Great-West Lifeco Inc. (76.6%); Great-West Life Assurance Company; Great-West Life & Annuity Insurance; Investors Group Inc. (67.7%); London Insurance Group Inc.; London Life Insurance Company.
Principal Competitors
Berkshire Hathaway Inc.; Brascan Corporation; Loews Corporation.
Further Reading
Fleming, James, Merchants of Fear, New York, Viking Press, 1986.
Koselka, Rita, 'Cash-Rich and on the Prowl,' Forbes, April 16, 1990, p. 56.
Leidl, Dave, 'Arthur Erickson,' BC Business, August 1991, p. 56.
McIntosh, Andrew, 'Power Shift,' Canadian Business, August 1996, p. 26.
Power Corporation of Canada, Power Corporation of Canada: Seventy-Five Years of Growth, Montreal: Power Corporation of Canada, 2000, 32 p.
— Carol I. Keeley; Updated by Jeffrey L. Covell
Wikipedia on Answers.com: 

Power Corporation of Canada

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Power Corporation of Canada, Inc.
TypePublic
Traded asTSX: POW
IndustryConglomerate
Founded(1925)
HeadquartersMontreal, Canada
Key peopleJames Burns andMichael Pitfield, (CEO)
Productsmedia, pulp and paper, and financial services
RevenueDecrease CAD 32.9 Billion (2011)
Net incomeIncrease CAD 907.0 Million (2010)
Employees15,500
WebsitePowerCorporation.com
Power Corporation of Canada is a Canadian company with assets in North America and Europe in a number of industries. These industries include media, pulp and paper, and financial services.
The corporation is known for its active participation in Canadian politics through its relationships and the relationships of the Desmarais family with prominent politicians of all political stripes.
The company was criticized for its links with Canadian politics,[1] and specifically for its commitment to the defense of federalism in Quebec. Indeed, several former Canadian prime ministers have worked on staff:Brian Mulroney, Jean Chrétien, Paul Martin.
Contents

History

Power Corporation of Canada was formed in 1925 by stockbrokersArthur J. Nesbitt and his partner Peter A. T. Thompson. Nesbitt served as the company's first president. Power Corporation was created as aholding company to manage their substantial investments in public utility companies involved in the electrical power industry in Quebec's Eastern Townships plus in the other Canadian Provinces of Ontario, Manitoba, and British Columbia. In the latter part of 1930s, the company acquired a controlling interest in Bathurst Pulp and Paper Company Ltd. and in 1938, Canadian Oil Companies Ltd., selling the latter toShell Oil Company in 1962.
In 1952, Arthur J. Nesbitt was succeeded as president by his son Arthur Deane Nesbitt (1910–1978). The family sold most their interest in Power Corporation to the Paul Desmarais group in 1968 and by 1970 no longer had any involvement.
Power Corporation owns 100% of Gesca Ltée, 66.4% of Power Financial Corporation and 7.1% of CITIC Pacific.
While it was originally established as an electric utility holding company, under the control of politically connectedPaul Desmarais, Sr., the company became a conglomerate with major interests in publishing and the finance industry.[2] Power Corp is widely described as the power behind the Canadian government and influential elected officials.[3]

Corporate governance

Current members of the board of directors of the company are: Laurent Dassault, André Desmarais, Paul Desmarais,Paul Desmarais, Jr., Anthony Graham, Robert Gratton, Don Mazankowski, Jerry Nickerson, James Nininger, Robert Parizeau, Michel Plessis-Bélair, John Rae, Amaury-Daniel de Seze, and Emöke Szathmáry.
Directors Emeritus of the company are: James Burns and Michael Pitfield.

UN Oil-for-Food Scandal

A U.S. investigation into the UN Oil-for-Food scandal determined that Power Corporation had extensive connections to French bank BNP Paribas, which was selected in 1996 to broker the Oil-for-Food program. Power owned a stake inParibas through its subsidiary Pargesa Holding SA.[4] Pargesa Holding SA’s investment portfolio also includes Imerys, a mining entity majority owned by the Desmarais family and Belgian tycoon Albert Frère.[5]
The Desmarais family and Frère are also the largest shareholders in oil company Total SA, France’s largest oil company.[6] Total was the subject of a formal investigation by the United Nations in February 2010 for bribery charges concerning oil deliveries from Iraq during the rule of dictator Saddam Hussein.[7][8]

Politics

The company is controlled by Paul Desmarais, Sr.. Paul Desmarais, Jr. is one of thirty members of the North American Competitiveness Council, a group whose advice directs the policies of Security and Prosperity Partnership of North America (SPP). Additionally, the company has long been a close ally of the Liberal Party of Canada, although former or current members of other Canadian political parties have also worked for Power Corp. A brief summary of the connections between Power Corp. and those with political power in Canada is below.
  • Former Prime Minister of Canada, Paul Martin, was hired in the 1960s to work for Paul Desmarais, Sr. by Maurice Strong. Martin became President of Canada Steamship Lines, a subsidiary of Power Corp., and in 1981 Desmarais sold the company to Martin and a partner. Martin went on to make his personal fortune as an owner of CSL.
  • Former Prime Minister of Canada Jean Chrétien sat on the board of Power Corp. subsidiary Consolidated Bathurst in the late 1980s before he became the leader of the Liberal Party of Canada. Chrétien's daughter France is married to the son of Paul Desmarais, Sr., André. Also Chrétien's chief of staff Eddie Goldenberg worked in the past for Power Corp.
  • Former Prime Minister of Canada, the late Pierre Trudeau, served in the mid-1990s on Power Corp.'s international advisory board. Trudeau's assistant Ted Johnson also worked for Power Corp. During the Trudeau administrationMichael Pitfield held a variety of positions in government but during his time in the private sector he was at one time a Vice-Chairman of Power Corp. and is currently listed as a Director Emeritus.
  • Former Prime Minister of Canada Brian Mulroney also has a relationship with Power Corporation. Mulroney's friend Ian MacDonald described Desmarais as “Mulroney’s mentor in the business world,” and it is believed that Mulroney has done legal work for Power Corp. since the end of his term as Prime Minister. Additionally, former Mulroney Minister of Transport Don Mazankowski is currently Power Corp.'s company director.

Assets

La Presse
Le Soleil
La Voix de l'Est
La Tribune
Le Nouvelliste, acquired in 1968
Le Droit
Le Quotidien
Cyberpresse
50% of Parjointco N.V., who owns
61.4% of assets of Pargesa Holding S.A., who owns
50.2% of assets of Groupe Bruxelles Lambert
42.5% of assets of Imerys (GBL has another 20.7%)
Great-West Lifeco Inc.
Great-West, compagnie d'assurance-vie
London Life, Compagnie d'Assurance-Vie
La Compagnie d'Assurance du Canada sur la Vie, (la Canada-Vie)
IGM Financial Inc.
Mackenzie Financial Corporation

Administration

In 2005, the board consisted of : Laurent Dassault, André Desmarais, Paul Desmarais, Sr., Paul Desmarais, Jr., Anthony Graham, Don Mazankowski, Jerry Nickerson, James Nininger, Robert Parizeau, Michel Plessis-Bélair, John A. Rae, Amaury-Daniel de Seze and Emöke Szathmáry.

References

  1. ^ Connectign the power, Western Standard, May 14, 2005.
  2. ^ The name is Power and it fits, The New York Times, January 25, 2007.
  3. ^ Globe and Mail hyperventilating on Harper picture misses the real news, Canada Free Press, June 25, 2010.
  4. ^ Pargesa Holding SA, FT.com
  5. ^ Frere and Desmarais Families of Belgium and Canada—The Real Power Behind Imerys, Webshells
  6. ^ Gore backed by group linked to oil industry?, Calgarysun, April 21, 2010.
  7. ^ Total Faces Iraq Oil-for-Food Bribery Investigation, Business Week, April 6, 2010.
  8. ^ Total under investigation over Iraq oil-for-food, Reuters, April 6, 2010.

External links



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